KOSPI Shows Only Volatility Without Clear Direction "There Is Upward Momentum, But..."

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[Asia Economy Reporter Lee Seon-ae] The domestic stock market closed slightly lower without a clear direction.

On the 22nd, the KOSPI closed at 3,035.46, down 4.07 points (0.13%) from the previous trading day. The KOSPI opened at 3,040.01, up 0.48 points (0.02%), and fluctuated around the 3,040 level. The KOSDAQ closed at 955.38, up 3.27 points (0.34%) from the previous session. It started at 953.04, up 0.93 points (0.10%), briefly reversed to a decline, but then maintained an upward trend until the close.

Lee Kyung-min, a researcher at Daishin Securities, explained, "Amid growing uncertainty due to strengthened lockdown measures in Europe caused by the spread of COVID-19 variants, the market repeatedly fluctuated within a limited range without a clear direction while monitoring U.S. Treasury yield movements."

Foreigners and institutions intensified their joint selling, while individual investors were the sole buyers, engaging in a tough tug-of-war. In the KOSPI market, individuals bought stocks worth 579.9 billion KRW, while foreigners sold 547.1 billion KRW. Institutions also net sold 32.9 billion KRW. In the KOSDAQ market, individuals and institutions net bought 51.3 billion KRW and 42.6 billion KRW respectively, while foreigners net sold 103.5 billion KRW.

Among the top market cap stocks in the KOSPI, Samsung Electronics (0.12%), Samsung Biologics (0.99%), and Kakao (0.30%) rose slightly. POSCO closed up more than 5% at 5.20%. SK Hynix ended flat. Naver (-1.37%), LG Chem (-3.01%), Hyundai Motor (-0.22%), and Samsung SDI (-2.87%) declined. In the KOSDAQ top market cap stocks, Celltrion Healthcare (2.55%), Celltrion Pharm (0.13%), and Pearl Abyss (1.25%) closed higher, while Alteogen (-0.70%), Kakao Games (-0.19%), and Seegene (-2.79%) closed lower.

By sector in the KOSPI, the electric and gas utilities sector fell more than 3%, and transportation equipment declined by about 1%. Non-metallic minerals, pharmaceuticals, chemicals, paper and wood, securities, food and beverages, services, distribution, medical precision, manufacturing, and electrical and electronics sectors also closed lower. Conversely, machinery and steel & metals rose more than 3%, and transportation and warehousing increased by about 2%.

The KOSDAQ sectors showed mixed trends. Digital content and paper & wood sectors rose by about 2%. Financials, distribution, metals, IT software, and semiconductors sectors increased by about 1%. Meanwhile, telecommunications equipment fell by about 2%, and textiles & apparel, transportation equipment parts, information devices, chemicals, general electrical & electronics, IT parts, software, pharmaceuticals, broadcasting services, telecommunications services, construction, and manufacturing sectors declined by less than 1%.

Seo Sang-young, a researcher at Kiwoom Securities, said, "Last Friday, the Federal Reserve (Fed) announced the termination of the Supplementary Leverage Ratio (SLR), which excluded U.S. Treasury bonds and reserves from banks' required capital calculations. Therefore, it is necessary to pay close attention to daily interest rate changes this week." He added, "Especially with the end of SLR, demand for Treasury bonds from banks may decrease, so we need to watch how bid rates and indirect bidding volumes develop in the 2-year, 5-year, and 7-year Treasury auctions this week."

He continued, "Considering that Treasury sales had already been underway before the Fed's announcement, the impact may not be significant, but if demand weakness becomes prominent, interest rate volatility could increase. Furthermore, with key figures including Fed Chair Jerome Powell scheduled to speak this week, their remarks could influence interest rates," he added.

Han Ji-young and Chae Hyun-gi, researchers at Cape Investment & Securities, explained, "The KOSPI is still unable to find a clear direction and is only generating volatility. The upward factor is the market's reduced sensitivity to rising interest rates, while the downward factor is the possibility of further market interest rate increases due to the Fed's insufficient crisis management." However, they noted, "The current interest rate rise causing market anxiety is a temporary concern, and the 10-year U.S. Treasury yield at around 1.7% is likely a short-term peak. This suggests that market sensitivity to interest rates will decrease toward the end of the month, so it is advisable to refrain from selling at this point."

Seo Jung-hoon, a researcher at Samsung Securities, said, "The reason the current stock market response is difficult is due to the absence of clear earnings improvement. However, macro indicators based on surveys (e.g., PMI) are showing unprecedented upward momentum," he emphasized.

This content was produced with the assistance of AI translation services.